With $5 Million Raised, Provi Aims to Streamline Alcohol Ordering for Retailers

May17, 2018

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Chicago-based e-commerce marketplace Provi today announced the completion of a $3.5 million funding round.

Provi, which aggregates distributor inventories and serves as a one-stop shop for retailers to search and place alcohol orders, has now raised $5 million via two funding rounds with an investor list that includes Hyde Park Angels, Hyde Park Venture Partners, Ludlow Ventures, and Sandalphon Capital, among others.

Speaking to Brewbound, Provi CEO Taylor Katzman said the company is “in expansion mode” and will use the funding to “continue the growth.”

“We’re in a heads-down position where we’re just continuing to expand and work with the great partners that we have,” he said.

Beyond facilitating transactions between retailers and wholesalers, Provi also collects analytics on sales placed through the platform, which it then provides to partner wholesalers and sells to third-party companies that are interested in the data, Katzman said.

“We are now collecting purchasing behavior data within the industry, which has never been collected before,” he said. “Half of this industry — $120 billion, currently — is on the on-premise side, and no one knows what’s happening.”

The Provi web and mobile app is currently available to retailers and distributors in the greater Chicago and Denver metro areas. The company is also in the process of launching in the Atlanta area with a full rollout slated for June 1, said Katzman, who previously worked as Midwest operations manager for consumer-facing e-commerce alcohol beverage platform Drizly.

“We are now being actively reached out to by wholesalers who want us to come to their market,” he added.

In the last six months, Provi’s user base has increased by 500 percent, but Katzman declined to disclose specific user figures. However, he said the company has “hundreds of people utilizing the platform and doing tens of millions of dollars [of sales] through the system.”

The company’s current client list includes one of the largest Anheuser-Busch distributors in the country, Chicago’s Lakeshore Beverage, and another A-B wholesaler, Eagle Rock Distributing Company in Georgia. On the retail side, users include Illinois-based restaurant chains Four Corners Tavern Group, DineAmic Group and the Lou Malnati’s Pizza.

So how does Provi work?

The Provi database features thousands of products from within wholesaler portfolios. Retailers shop the database, select items and place their orders. Once an order is placed, Provi messages sales reps assigned to those accounts for fulfillment.

According to Katzman, the average retailer orders products from as many as 15 distributors weekly.

“We’re working in a $240 billion industry that’s still very much run via SMS and paper invoices,” he said. “We aggregate all of that ordering into a single interface.”

Katzman believes Provi simplifies the ordering process while working within the three-tier system. For bars, restaurants and liquor stores, the platform is free to use.

“We’re not charging them to be part of the marketplace,” Katzman said. “This is for the retailers’ benefit.”

However, the company charges partner wholesalers a fee in exchange for automatically facilitating orders placed through the service and integrating into their API. And if a wholesaler doesn’t work with Provi, that company can still receive orders placed by its retail customers, without incurring a fee, but a sales rep must manually input order information.

Within the platform, Provi also offers product suggestions to retailers. Provi’s partner wholesalers are given priority placement on the app, and the products they sell are suggested ahead of those offered by non-partner distributors. Katzman added that the company can drill down into the analytics within a few miles radius of a retailer to share suggestions for product selling well nearby.

When asked if the company had received pushback from breweries or wholesalers that did not wish to have their products listed on the platform, Provi director of marketing Ryan Philemon said those types of conversations had yet to arise.

“That’s something that we haven’t really talked about,” he said. “ If that issue arises, we would definitely address that and come up with a strategy to fix something like that.”

Nevertheless, potential opposition from craft breweries — and wholesalers — that maintain specific retail execution strategies is something that the company would work to overcome, Philemon said.

Meanwhile, Provi has grown to 20 employees. In February, Provi hired former Anheuser-Busch InBev executive Nathan Mansperger, whose resume includes stints at A-B’s head of ecommerce in North America and regional trade marketing director as well as co-founder of the October online magazine and eRetail global director for ZX Ventures, the company’s “global growth and innovation team.”

As vice president of wholesalers and suppliers, Mansperger will be tasked with working directly with distributors to help integrate their products into Provi’s platform, Katzman said. The company will also be leaning on him to leverage the relationships he built with A-B’s wholesalers and other retailers.

“He brings a ton of industry knowledge where he was working directly with companies like Instacart and Amazon and Drizly,” he added.